Give Economic Term

                                                  Desire

                                                        Demand

Desires refer to those wishes that a human being cherishes.

Demand refers to the quantity of goods that individuals are willing to buy.

They may or may not be backed by financial power.

It should be backed by financial power.

For example: Walking on the moon

For example, a consumer demands 2 kg sugar at Rs 10 per kg and 3 kg sugar at Rs 8 per kg.

                                       EXTENSION OF DEMAND

                                   CONTRACTION OF DEMAND

1. Meaning: – Extension of demand is a case of variation of demand. It takes place when quantity demanded is more due to a fall in price alone. Other factors remain constant.

Contraction is also a case of variation of demand. It takes place when quantity demanded is less due to rise in price alone. Other factors remain constant.

2. Movement: –

The movement is downwards along the same demand curve.

The movement is upward along the same demand curve

                                     Increase in Demand

                                      Decrease in Demand

a) An increase in demand refers to a rise in demand due to changes in other factors, price remaining constant.

a) A decrease in demand refers to fall in demand due to changes in other factors, price remaining constant.

b) An increase in demand occurs when more are purchased at the same price and the same quantity is purchased at a higher price.

b) A decrease in demand occurs when less is purchased at the same price or the same quantity at a lower price.

c) Increase in demand is a result of

(1) Increase in income

(2) Increase in price of substitutes

(3) Decrease in price of complementary goods

(4) Increase in population/

(5) When goods are in fashion.

c) Decrease in demand is a result of

(1) Decrease in income.

(2) Decrease in price of substitutes.

(3) Increase in price of complementary goods.

(4) Decrease in population.

(5) When goods go out of fashion.

d) When there is an increase in demand, the demand curve shifts to the right from DD to D₁D₂ as shown in the figure.

d) When there is decrease in demand the demand curve shifts to the left from DD to D₂D₂ as shown in the figure.